Ford to stay away from entering small car market

and September this year, Ford sold over 24,000 Fiesta cars and expects to sell around 30,000 units during the entire year.

It has

been able to get a market share of 15.6 per cent in the premium sedan segment.

Bangalore, Oct. 12

With almost every other carmaker planning a small car, Ford has decided to keep away from playing the volumes game.

"We have decided to keep away from entering the small car market," Ford India's Vice-President for Marketing and Sales, Mr Scott McCormack, told

Business Line

. He said though the company plans to launch a new model every year, the small car market does not suit its requirements. Small cars in India account for more than 70 per cent of around one million domestic car market.

The world's largest car maker, General Motors, has already announced its plans to enter the small car market, while the second largest car maker Toyota is firming up its plans to launch a small car towards the end of 2008.

Priority

"We don't have this target of getting 10 per share market share by 2010," Mr McCormack said. He said the company's priority would be to utilise the full capacity of its plant, which is around one-lakh cars per year. Currently, 65,000 cars roll out of its plant near Chennai with two shifts a day.

He admitted that the 1.6-lt Ford Fusion, which is considered the country's first crossover car, had got off to a bumpy start because "it was launched into a wide space." However, it had started doing extremely well since its relaunch in August. The stripped down version which costs nearly Rs 75,000 less now to around Rs 5.7 lakh has seen its sales nearly double to around 190 units a month.

"One of the takeways from our experience in launching Ford Fusion is that you need lots of patience if you have to succeed in the Indian market," Mr McCormack said.

However, the 1.4 lt and 1.6 lt Ford Fiesta has performed extremely well since its launch late last year. Between January and September this year, Ford sold over 24,000 Fiesta cars and expects to sell around 30,000 units during the entire year. It has been able to get a market share of 15.6 per cent in the premium sedan segment. Mr McCormack said with the 1.3 lt Flair being repositioned, even its sales have gone up to around 800-1000 units per month.

He said with Ford's operations in India having already turned around , the company has enough cash to pump in for new car launches and for market expansion activities. It initially invested around $375 million and last year invested around $75 million into its operations.

(This article was published in the Business Line print edition dated October 13, 2006)

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